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Easy setup of Annual Leave policies (Hong Kong)
Easy setup of Annual Leave policies (Hong Kong)

Annual leave entitlement, leave grades, increment, proration, payroll(ADW), carried forward leave settings for Hong Kong users.

Nicholas avatar
Written by Nicholas
Updated over a week ago

Tracking of Annual Leave can get pretty messy with repeated increments, carried forward leave balance and proration. However, with the correct settings in place in our Leave module, the calculation and tracking of leave become hassle-free.


To configure the default Annual Leave settings for the whole company, head to Leave > Manage my leave policies > Settings > Leave Types > Annual Leave (Default).

Get to know each setting type for Annual Leave and how to set this up in the system, dependent on your company policies:

Step 1: Renaming of Annual Leave and Half-day Leave

  • Annual Leave can be renamed if you like (e.g. Yearly Leave).

  • Taking half-day of leave is typically practised in companies. You can toggle between this settings for the available options.

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Step 2: Leave Entitlement Settings

1) Accrued by completed months/calendar days

  • Leave for an employee is accumulated and awarded in parts throughout the course of the employee's period of entitlement.

  • Leave is earned on each complete month/day from employee's date of hire.

  • Prevents staff from over-consuming leave but restricts longer holidays to the year end.

2) Available upfront (prorated by completed calendar month/day for an incomplete period)

  • All days of leave per year will be awarded to the employee and taken immediately at the start of each entitlement period.

  • Entitlement for the year is prorated by the number of complete months/days in a year according to Hire/Resign date for an incomplete period.

  • Allows staff the most flexibility for planning leave each year.

  • Overconsumption of leave before a Resign Date is keyed in will display a negative balance.

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Step 3: Period of Entitlement

1) Calendar Year (1 Jan to 31 Dec)

  • Leave entitlement refreshes on 1 Jan, according to calendar year.

  • Preferred option for easier comparison of individual balance closer to year end.

2) Anniversary of employee's date of hire

  • Entitlement replenishes on an employee's anniversary of date of hire.

3) Custom Period

  • Entitlement replenishes on the anniversary date of a custom date selected.

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Step 4: Determining When Leave should be Made Available to Employees

Available options:

  1. Upon being hired

  2. After a fixed probation period e.g. 3 months.

  3. On confirmation date (when it's entered in the employee's profile)

  4. After a fixed period or when a confirmation date entered is earlier than the end of the probation period.

NOTE: While this setting affects application of leave, leave entitlement is always calculated from employee's Hired Date.

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Step 5: Carried Forward Leave Policies

Carried Forward (CF) leave policies usually need to be set up for employees who have unused leave towards the end of their period of entitlement.

Unused leave can either be forfeited at the end of each entitlement period or rolled over to the next period by a specific number of months, up to a year maximum (12 months).

1) Can be carried over to the next period

  • You can set the time frame which the leave can be brought forward into the next period before it expires in the system.

  • The CF amount can be limited to an amount of days or by percentage of an employee's yearly entitlement.

2) Is forfeited at the end of the period

  • No leave will be brought forward into the next period

  • Will completely expire at the end of the set period

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Step 6: Payroll Setting (ADW)

This setting determines how Annual Leave will be reflected in payroll.

1) Pay Full Amount

  • Any AL taken by an employee will be considered a fully paid leave in Talenox

  • No AL will be ported over to payroll for processing as a leave payment/deduction

2) Pay ADW or 4/5 ADW

  • Any AL taken by an employee will be calculated and paid out to the employee according to 1 day of ADW (or 4/5 ADW) per Annual Leave taken in payroll

  • Each day of AL taken by an employee will be reflected in payroll as a leave payment under Step 2 - Select Leave Payment/Deduction automatically each month

NOTE: ADW is calculated in Talenox automatically based on the past 12 months of payroll processed in the system. You can refer to this guide to learn more about how we calculate ADW in Talenox.

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Step 7: Entitlement Quantity

Entitlement quantity can be according to a fixed or progressive award schedule.

1) Fixed entitlement quantity

  • Leave will be a fixed amount for an employee in their tenure with the company

2) Progressive award schedule

  • Leave entitlement quantity can increase with years of service. Feel free to delete or add rows (award schedules) as necessary.

  • The example below shows that employees in the company will have:

    • 18 days of AL in their first year working with the company.

    • 19 days of AL in their second year working with the company.

    • 20 days of leave from their third year onwards with the company.

If you require more than one Annual Leave setting to cater for different groups of employees, you can create new Leave Grades by following the steps in this guide here.

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